Supermicro Stock Jumps 10% on Doubled Margins and Record AI Backlog
Supermicro stock (SMCI) jumped nearly 10% in after market trading on Tuesday. It follows Super Micro Computer posting a 17.5% quarterly gross margin, almost double last year, and a record order backlog.
Less than two years ago, the AI server maker was fighting to keep its Nasdaq listing. Now it projects up to $72 billion in annual sales.
Why Supermicro Stock Rallied on Doubled Margins
Supermicro reported results after Tuesday's close. Net sales reached $11.1 billion for the quarter ended June 30, nearly double the $5.8 billion a year earlier.
Yet the margin move stole the show. Gross margin hit 17.5%, up from 9.9% just three months earlier. Net income climbed six-fold to $1.18 billion.
Adjusted earnings, which exclude stock-based pay, hit $1.70 per share. That was two and a half times the 68-cent consensus tracked by Zacks. Revenue, meanwhile, landed at the low end of the company's own $11 billion to $12.5 billion target.
Thin margins had long been Supermicro's weak spot. Big cloud customers squeezed prices, and rivals fought hard for every AI server deal. Tuesday's numbers also push back on fears that AI spending is slowing.
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